Following the release of the budget reconciliation bill by the House Ways and Means Committee, the WICPA and AICPA are expressing strong concerns over the discontinuation of the state and local tax (SALT) pass-through entity tax (PTET) deduction used by specified service trades and businesses (SSTBs) across the country.
This tax legislation would increase taxes on the partners/owners of many service-based businesses, such as accounting firms, discourage the creation and growth of such businesses and further expand the disparity between C corporations and pass-through entities.
The budget reconciliation bill proposed several provisions that the WICPA and AICPA have long supported, but the PTET deduction has been a lifeline to millions of businesses impacted by the SALT cap implemented in the Tax Cuts and Jobs Act. The bill targets service providers who were already substantially limited under the SSTB rules for the qualified business income deduction.
Eliminating this deduction hurts millions of American job creators to provide corporations with extended benefits, and the WICPA will continue to work closely with our colleagues at the AICPA to urge Congress to retain the PTET SALT deduction. See the AICPA’s call to action in opposition of this tax legislation here.